The Allstate Corp. (ALL Quick QuoteALL - Free Report) is scheduled to report first-quarter 2017 results on May 2, after market close.

Last quarter, Allstate surpassed the Zacks Consensus Estimate by 34.78%.

Let’s see how things are shaping up for this announcement.

Q1 Flashback

Allstate’s exposure to catastrophe losses has always injected volatility into its earnings. Its 2016, profitability suffered from a 49% year-over-year increase in cat losses. The first quarter will also bear the brunt of cat losses. The company recently announced expected catastrophe loss of $516 million pretax or $335 million after tax for the month of March and an estimated $781 million pretax or $508 million after tax for the first quarter.

Catastrophe losses in the to-be reported quarter comprised 28 events at an estimated cost of $777 million pretax, plus unfavorable reserve re-estimates of the prior-reported catastrophe losses. One severe hail event, primarily affecting Texas in March, accounted for over one-third of the catastrophe losses in the quarter.

During the quarter, the company closed the acquisition of SquareTrade, a protection plan provider for consumer electronics and connected devices, for $1.4 billion. Allstate previously said that the SquareTrade deal would dilute earnings for three years.

The company took Auto profit improvement initiatives over the last two years, which are expected to bring about growth in its Property-Liability segment in 2017. An effect of this will also be felt in the first quarter.

On the net investment income front, the Fed has increased the interest rates which are still at very low levels. The company expects declines in both invested assets and portfolio yield to result in lower net investment income in future periods.

Shares brought back by the company in the quarter under review will also add to the bottom line.

Earnings Whispers

Our proven model does not conclusively show that Allstate is likely to beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: Allstate has an Earning ESP of 0.00%. This is because the Most Accurate estimate stands at a $1.04 per share, in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Allstate carries a Zacks Rank #4 (Sell). We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are some companies that you may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:  

Prudential Financial Inc. (PRU Quick QuotePRU - Free Report) will report first-quarter 2017 earnings results on May 3. The company has an Earnings ESP of +0.38% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Priceline Group Inc. has an Earnings ESP of +2.06% and a Zacks Rank #3 (Hold). The company is expected to report first-quarter earnings results on May 9.

Moody’s Corporation (MCO Quick QuoteMCO - Free Report) has an Earnings ESP of +7.38% and a Zacks Rank #2. The company is expected to report first-quarter earnings results on May 5.

Sell These Stocks. Now.

Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500. See today's Zacks "Strong Sells" absolutely free >>